MUMBAI, NOV 6: Close on the heels of the recent downgrading of the non-banking finance companies (NBFCs), Crisil has downgraded six major manufacturing companies: Garware Polyester of the Shashikant Garware group, JK Industries of the Singhania group, Herdillia Chemicals Ltd and Rama Newsprint & Papers Ltd, Shivaji Works Ltd and S & S Power Switchgear Ltd. It has also downgraded MCS Ltd and Mardia Leasing & Financial Services Ltd.The rating of the Rs 54 crore NCD issue of Rama Newspring & Papers Ltd has been downgraded to `D' category from `BB' indicating that the instrument is in default or is expected to default on maturity. Similarly, Shivaji Works Ltd (SWL) has also been downgraded to default category. The company's Rs 5 crore NCD programme has been downgraded to `C' from `BB' with `Ratingwatch' indicating that the instrument is vulnerable to default. The revised rating indicates that the degree of safety regarding timely payment of interest and principal on the instrument is doubtful.In the case of Garware Polyester Ltd (GPL), a major company engaged in the flexible packaging business, the `A+' rating assigned to its NCDs of Rs 24.89 crore has been downgraded to `A' reflecting the increased financial risk profile of the company arising from time and cost overruns in implementation of its expansion project. The business risk has increased owing to excess capacity and declining realisations in the flexible packaging industry.The rating of the Rs 10 crore NCDs of Herdillia Chemicals Ltd (HCL), a leading manufacturer of heavy organic chemicals has been downgraded from `A-' to `BBB' reflecting increasing pressure on the company's operations as a result of reducing import duties on its products coupled with increasing operating and financing costs and continued exposure to group companies.The rating of Rs 131.43 crore NCDs and Rs 33.92 crores NCDs of JK Industires Ltd (JKL) has been downgraded to `BBB+' from `A' reflecting only moderate safety in repayment of the principal and interest. The rating revision is on account of increased competitive pressure on the company's tyre business. The Rs 10 crore NCD of S&S Power Switchgear has been downgraded to `A+' to `BBB' and the fixed deposit has been downgraded from `FAA-' to `FA-' reflecting the deteriorating financial performance and strained liquidity position.The NCD programme of MCS Ltd has been downgraded from `AA-' to `A-'. The revision reflects the weak business performance in the registrar and transfer industry characterised by increased competition in a depressed market scenario, sharp deterioration in the financial performance and strained liquidity. The FD of Mardia Leasing and Financial Services has been downgraded from `FA' to `FB'.
